Salaries and allowances for political office holders have always been problematic in Nigeria. In 1979, as soon as the National Assembly was inaugurated, the first debate they had was fixing their remuneration and as a consequence, the Nigerian Labour Congress under the leadership of Mr. Hassan Sunmonu, demanded an increase in salaries of Nigerians workers. At the end of a protracted negotiation, N125 per month was agreed between government and organized labour. With the return of democracy in 1999, the Constitution had mandated the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) as the body responsible for fixing salaries and allowances for legislators and recommending appropriate pay to the National Assembly for public officers in the executive and judiciary.
When it fixed the first pay for public office holders, RMAFC came up with what it termed reasonable packages for these categories of officers in a bid to discourage stealing in public officers and also minimize incidences of corruption in public offices. That was the precursor of the monetisation policy in which rather than allocate official cars, official accommodation and so on, government gives money to its employees in lieu. In 2007, RMAFC reviewed effected an upward review of salaries and allowances of political office holders. However, two-and-half years down the line, prices of crude in the international market fell to around $40 per barrel and President Umar Musa Yar’Adua in 2009 asked the commission to make a downward adjustment of the packages.
In its report on the review, the Commission noted that the 2007 remuneration package which had then been in operation for two-and-half years had become unsustainable “because of the current global economic crisis which has resulted in dwindling revenue to government.” It said that it became clear from the analysis of the macro economic factors and variables, that the national revenue profile could no longer sustain the current level of expenditure on recurrent cost. Hence, the need for the downward review of the remuneration package as contained in the Commission’s 2007 Report and the “Certain Political, Public and Judicial Office Holders (Salaries and Allowances, etc.) (Amendment) Act 2008”.
Exclusive data available to Economic Confidential shows that at the time, Nigeria’s average total earning per year between 2006 and 2008 was N6.273 trillion.
Average total distribution/receipts by federal, states and local governments during the period were N1.595 trillion, N1.113 trillion and N0.623 trillion respectively. With the 2007 remuneration package eventually implemented in 2008, the percentage total remuneration package for political public judicial officers per annum over average earning per year amounted to 10.88%; 44.49% and 95.01% for federal, states and local government respectively.
The whole analysis has shown two major issues: that the national revenue profiles of 2006, 2007 and 2008 were adequate to accommodate the expenditure obligations of government including payment of emoluments to Political Office Holders at current rate in 2006, 2007 and 2008, that the Local Governments appear to be the worst affected in terms of the percentage pay over the earnings since as high as 95.01% of their annual earnings is used to settle the payment of salaries and allowances of Political and Public Office Holders at that level.
The report was submitted to Yar’Adua, which he promptly forwarded to the National Assembly in form of bills for legislation. Senator David Mark was Senate President while Mr. Dimeji Bankole was Speaker of the House of Representatives. Unfortunately, they were never debated upon until the death of President Yar’Adua and his successor, President Goodluck Jonathan showed little interest.
In the 2007 remuneration package currently in use, annual basic salaries of the President and Vice President are N3, 514, 705.00 and 3,031,572.50 million respectively excluding other juicy allowances both in cash and kind. Chief Justice of Nigeria earns N3,363,972.50 million as annual basic salary, other judges earn averagely, N2, 035, 749.10 million annually.
According to exclusive documents obtained by Economic Confidential, political office holders in the executive and legislature including judicial officers totalling 1,268 with the federal government earn a combined N173,656,335,193.60. There are 4,418 individuals functioning in the same category in the 36 states earning a combined N360.091 billion while in the 774 local governments, there are 11,788 officers falling into the category earning N592.8 billion. In totality, 17,474 political office holders function in Nigeria’s public service with annual remuneration of N1.126 trillion.
Legislators earn allowances as percentages of annual basic salaries as follows: Accommodation 200 percent; Furniture – 300 percent once in four years; motor vehicle; 400 percent loan; Fuelling Allowance; 50 percent of basic salary; Personal Assistant- 25 percent; Duty Tour Allowance and Estacode when travelling within or outside the country; domestic staff – 50 percent; Entertainment –; Utility – 301 percent; Recess Allowance – 10 percent; Robe Allowance – 25 percent; Newspapers – 15 percent; Constituency Allowance – Senators 250 percent, Reps – 150 percent; Severance Gratuity – 300 percent once after tenure; House Maintenance; Responsibility Allowance – between five and 10 percent depending on office;
Annual total regular allowance for a Senator stands at N15, 299,320.00 million. In the irregular category of allowances, the Senator earns N6,079,200.00 for furniture and another N6, 079,200.00 as severance once in four years. Total irregular allowances are difficult to compute because estacode and duty tour allowances depend on how many local and international travels were conducted. The Senator also collects N8,105,600.00 as vehicle loan (which has never been repaid anyway).
And that in terms of percentage of pay (to these infinitesimal number of this class to a population of 175 million) to revenue, this translates to 10.88 for federal government; 44.49 percent for state governments and; for local government councils, it is a whopping 95.01 percent.
Ministers, Secretary to the Government of Federation (SGF) and Chairmen of the federal commissions are earning annual basic salary of N2,026,400 million with annual basic allowance of N179,516,640 million just as a Special Adviser to the President (SAs) earn N1,942,875.00 million as annual basic salary and at least N174,333,300 million annually as allowance.
RMAFC accused treasury managers of gross fiscal indiscipline and revenue drain pipes reveal that a Senator and a Representative earn more than one hundred times what a graduate on GL 08 – S15 receive annually as the ratio is more than twenty times when compared to what a director on GL 17 – S9 receive annually.
Aside these figures determined by the RMAFC, many state governments appoint far higher numbers of personal aides to governors. One governor appointed over 500 advisers and personal assistants whose salaries and allowances are anchored on allocations from the federation.
RMAFC also discovered that apart from the reduction in allowances, there are other areas of leakages and wastages in revenue at all the tiers of government that must be addressed in order to ensure increase in revenue and its judicious management. Some of the observations made are as follows:
“That there is non-compliance with the provisions of the remuneration packages such as contained in either the Report of the Commission or the Act itself. Such violations by the three tiers and arms of Government include arbitrary appointment of high number of Personal Assistants which is adding more cost to the running of government at the various levels. It is difficult to determine what value they add to service delivery or to governance;
“That there are too many frivolous local and foreign trips by political office holders throughout the country;
“That there is the acquisition and use of assets such as motor vehicles far in excess of what is approved for official use; e.g. governments parastatals and agencies purchasing project vehicles and eventually handing over same to their parent ministries as a way of circumventing the remuneration package;
“This practice negates the whole idea of monetization, principle of modesty in governance and the spirit of the remuneration packages particularly in the legislative arm of government throughout the country;
“That there is a large use of motorcades by officials in excess of what is either specified in the remuneration package or compared to what is practiced in other parts of the world. The Commission views this as a complete violation of the remuneration package because it has significantly increased the overhead cost of governance;
“That the local governments are spending over 95% of their revenue on salaries and allowances alone while the State Governments are spending approximately 50% for same. Also government at the Federal level is spending 67.3% of its revenue on recurrent (consumption) expenditure while only 32.7% is allocated to capital (investment) expenditure;
“That it has become necessary to diversify the economic base of the nation in order to generate more revenue at the Federal, State and Local Government Council levels;
“That the present state of the economy of the country calls for caution and belt tightening measures in the expenditure programmes of government;
“That the Country’s Gross Domestic Products (GDP) continues to fall and it is currently below 7.5%. The Commission advises the 3-tiers of government to put in place adequate expenditure management and control system;
“That there are delays in revenue remittances from collecting agencies resulting into huge amounts of Outstanding Transfers into the Federation Account;
“That there has been arbitrary granting of approvals in respect of waivers and other forms of exemptions by Government on Custom duties and other taxes. The Federal Government is advised to be cautious in granting waivers, concessions and taxes as these translate into huge losses of revenue to the Federation Account, and hence to all tiers of governments;
“That there are enormous inefficiencies and wastes in the oil industry arising from unfavourable Join Venture partnership terms and fiscal regimes; non-transparent Joint Venture Cash Calls and budgeting, with attendant high cost of production; inadequate arrangements for the monitoring of crude oil exports, petroleum products subsidies, lack of transparency in bidding, allocation of oil blocks, leases, etc.
“That it has now become the practice in Government to allocate funds to Committees through the Chairmen of those Committees rather than to their Secretaries who are the representatives of the Accounting Officers and who should be held responsible for the management and retirement of such funds.”